Fuel prices continue to dip as oil supplies rise

| 5/16/2005

The national average price for diesel fell 3.8 cents to $2.189 for the week ending May 16, according to the Energy Information Administration.

Though that price represents several weeks in a row of declines, it is still more than 42 cents higher than prices for the same week in 2004.

California checked in with the highest prices, though even there prices fell 8.6 cents to $2.432 per gallon. The rest of the West Coast fell 8.4 cents to $2.397 per gallon.

The lowest average price was found in the Midwest, where diesel came in at $2.129 per gallon, down 2.8 cents from the week before. Meanwhile, the Rocky Mountain region posted an average of $2.267 per gallon.

Both the Lower Atlantic and Gulf Coast regions came in at $2.141 per gallon, while the Central Atlantic posted an average of $2.315 per gallon. New England came in at $2.38 per gallon, while the entire East Coast averaged $2.204 per gallon.

Meanwhile, prices for light, sweet crude oil – from which diesel is made – continued to fall on May 16, hitting a low of $47.60 per barrel in daytime trading before bouncing back up above $48 per barrel.

Analysts credited the drop to the news that the Organization of Petroleum Exporting Countries pledged to continue producing oil at nearly full capacity in spite of ample stockpiles in the U.S.

Reuters reported that a number of OPEC’s member countries said they would not make cuts in production despite the softening of the market.

Analysts also said that, though prices would continue to drop for the short term, they could be expected to rise again as the summer driving season gets under way later this month.